Gen X’s Role in the Housing Downturn

Gen X’s Role in the Housing Downturn

Daily Real Estate News |
Thursday, January 03, 2013

During the housing crisis, Generation X made up the largest percentage of households in foreclosure — particularly the well-educated and affluent members of this generation, according to a study by the Federal Reserve Bank of St. Louis, “The Foreclosure Crisis in 2008: Predatory Lending or Household Overreaching?”

Generation Xers who had an average household income of $59,500 and 14.8 years of education were found to have the highest rate of foreclosures, with more than 1 in 10 in foreclosure, according to the St. Louis Fed's research.

The study also found these trends among those with the highest foreclosure rates during the housing crisis:

Home owners in foreclosure tended to pay 25 to 33 percent more for their homes and they tended to earn about 10 percent less than home owners not in foreclosure.

The median mortgage in foreclosure had a loan-to-value of about 96 percent, whereas the median mortgage not in foreclosure had a loan-to-value ratio of about 65 percent.